Monday, 16 June 2014

What NRIs need to do before buying property in India?

Non-resident Indians (NRIs) need to be vigilant and do their research before buying a property in India, says the exhibitor of a property show.
“One looking to buy a property in India must do his research well before investing in a property though the chances of being ripped off are much lower these days,” Sunil Jaiswal, CEO, Sumansa Exhibitions, organisers of Indian Property Show, told Emirates 24|7.
“You have the internet; you can do your research about the developer, or simply call people back home to check the developer’s reputation. I don’t think people do buy just on instinct anymore,” he added.
Investment in Indian property sector is one of the best investments among asset classes for various reasons including tangibility, less volatility, rental income and appreciating asset. JLL, a global real estate consultancy, said earlier that capital appreciation on real estate is far higher than the high-yielding deposits for NRIs.
“If you maintain a broad investment horizon and have chosen properties well, the capital appreciation on real estate translates into multi-fold putting all other asset classes behind,” Jaiswal said.
The 14th edition of the property show was opened on Thursday by Bollywood star Arbaaz Khan, who is the brand ambassador for the event. With four distinct pavilions, 40,000 properties, worth Dh16 billion, are on display by over 150 developers. The organisers expect to witness business transactions worth Dh343 million, which will be about 12 per cent higher than last year.

The three-day property event is being held from June 12 at Dubai World Trade Centre.

“Real estate sector has always been at the top of investment opportunity watch-list of non-resident Indians. A place in the homeland also gives a sentimental support and sense of security, which is another reason for their investment in real estate. NRIs invested over Dh7.34 billion ($2 billion) in Indian real estate in 2013,” said Honey Katiyal, CEO, Investors Clinic.

NRIs spent at least 35 per cent more in real estate across the country in 2013 compared with the previous year and made for almost 12 per cent of total apartment sales in the top seven cities. The Dh7.34 billion investments, however, does not include Punjab, Gujarat and Kerala states where a bulk of repatriation happens.

According to the World Bank, India led remittance flows globally, receiving $70 billion in 2013, which eventually leads to investments in real estate.

The Housing Sentiment Index, released by IIM Bangalore and Magicbricks.com in May, found that home buyers across eight of 10 cities surveyed expect real estate prices to go up over the next six months.

Cities surveyed include Ahmedabad, Kolkata, Mumbai, Delhi, Hyderabad, Pune, Noida, Gurgaon, Bangalore and Chennai.
Nearly 70 per cent of the people surveyed preferred to buy apartments, IIM Bangalore-Magicbricks.com report said.
Pratik Patel, Director, Rajesh LifeSpaces, believes NRIs usually look for a property that can replicate their standard of living regardless whether the property will be utilised for end use or taken purely from an investment point of view.
“They don’t like to compromise on standards, convenience of lifestyle options and most importantly security. Any property with the said features and ranging anywhere between Dh600, 000 and Dh1.5 million is popular with them”, he added.

Source: Emirates 24X7


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